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Politics & Government

Analyst: Tax Cut Would Please Some Homeowners While Boosting Structural Deficit


The Legislature's Joint Finance committee has unanimously advanced Gov. Walker's proposed $100 million property tax cut, to take effect this year.

As committee members considered the plan Tuesday morning, the Legislative Fiscal Bureau released an analysis, indicating the tax cut along with worker training bills the governor wants, would push Wisconsin's structural deficit from $545 million to $725 million by 2015. The projected deficit would be smaller than most, going back to 1997.

The news comes one day after the Walker administration announced that state revenue was $89 million greater than expected last fiscal year.

Walker unveiled his property tax cut plan last week, shortly after Democrat Mary Burke announced she would run for governor in 2014. The governor’s move seems to be political, according to Todd Berry, president of the non-profit Wisconsin Taxpayers Alliance. Berry says Walker's predecessor, former Gov. Jim Doyle did the same, the year before his re-election bid.

“Wisconsin's property taxes are high, so there is a political advantage in doing this...but the actual amount will not be large," Berry says. He estimates the typical property tax bill will decrease a half percent (between $10-$20) but says because the money would be funneled through the school aid formula, "some areas will do better than others...and one in seven districts, rather wealthy ones, will get no school aid," Berry adds.

Berry says former Gov. Doyle steered nearly all tax cuts toward property tax relief, so the results were noticeable. Berry says Gov. Walker has pumped more relief, more than $600 million, into income taxes over two years and is applying less in property tax cuts.

According to Berry, state leaders must decide whether to offer many homeowners a slight break this year and next or tuck more money away, in case the state faces an economic downturn.